New CRL Report on Housing in Rural Communities, Published by Brookings, Provides Insights for GSE Reform


Proposed Changes In Housing Finance Reform Could Reduce the Ability of Community Banks and Credit Unions to Provide Mortgage Credit

WASHINGTON, D.C. – (RealEstateRama) — Brookings Institution’s Center on Regulation and Markets published a report by the Center for Responsible Lending (CRL) on the state of the rural housing market. While almost a quarter of Americans live in rural communities, they are often overlooked in policy discussions. The CRL report analyzes the most recent Home Mortgage Disclosure Act (HMDA) data and reviews aspects of proposed changes to the Government Sponsored Enterprises (GSEs) to assess their effect on rural communities. Read the report.

Among the report’s key findings:

  • Nearly 74 million people, including more than 15 million people of color, live in rural areas.
  • Lenders originated over 1.2 million mortgages in rural areas in 2016 – 17.5 percent of the mortgage market.
  • Fannie Mae and Freddie Mac provided critical access to credit in rural areas, with 30.3 percent of all loans originated in 2016 sold to the GSEs.
  • Community banks and credit unions with less than $10 billion in assets originated nearly one in three rural mortgages.
  • Proposed changes in housing finance reform could reduce the ability of these community lenders to provide mortgage credit.

Center for Responsible Lending President Mike Calhoun issued the following statement:
Today’s report demonstrates the critical role that community banks, credit unions, and GSEs, working together, have played in the economic recovery and in support of rural America’s housing market.

Specifically, GSEs help to level the playing field between community banks, credit unions and big financial institutions through a cash window and parity in pricing. This enables community banks and credit unions to have long term, productive relationships with borrowers. Also, the GSEs’ Duty to Serve mandate requires them to strengthen the underserved rural housing market.

Some proposed changes to housing finance would undercut these key features and could hurt the ability of community banks and credit unions to serve rural borrowers. Policymakers should reject that approach. Instead, they should support a level playing field and Duty to Serve goals.

Separate from this report, leading civil rights and housing advocates recently wrote to the Senate Banking and House Financial Services committees about their groups’ and their constituents’ voices being locked out of GSE reform negotiations and to express concern over potential roll backs of the Affordable Housing Goals.

For more information, or to arrange an interview with a CRL spokesperson on this issue, please contact Matthew Kravitz at "> or 202-349-1859.

Source: Center for Responsible Lending

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